All versions of fedora will upgrade to the newer version but fedora Core 3 has Logical volumes as default partitioning and core 2 and below does not. When you upgrade and you wish to keep your settings you will have to request to keep your existing LINUX partitions intact. If you are unfamiliar with the differences between Logical volumes Conventional partitions then check this link:
Sometimes the improvements that are implemented into fedora are at the foundation level and given the benefits of Logical volumes you want a clean install, but you be the judge. I personally Have Core 2 on all mine boxes and held off on Core 3 because of this and am going to start fresh with Core 4. I have numerous applications the require larges amounts of configuration such as Vmware, Wine, Nessus, and MySql /php, so it is not worth the trouble once a year to upgrade but every other year is do able.
Hope this helped